$37.5bn crude, gas proceeds not remitted to FG –NEITI


The Nigeria Extractive Industries Transparency Initiative (NEITI) told the House of Representatives on Wednesday that the Nigerian National Petroleum Corporation (NNPC) had yet to remit crude oil proceeds totalling $21.7bn to the Federation Account.

It also said the Federal Government’s $15.8bn share of dividend from investment in the Nigeria Liquefied Natural Gas Limited had yet to be remitted to the Federation Account.

The government owns 49 per cent equity in the NLNG.

The Executive Secretary of NEITI,  Waziri Adio, gave the figures while making a presentation to an ad hoc committee of the House at the National Assembly in Abuja.

The committee, which is chaired by a member of the All Progressives Congress from Adamawa State, Abdulrazak Namdas, is investigating the alleged theft of $17bn crude and gas resources from the country between 2011 and 2014.

Adio said NEITI wrote the NNPC on the non-remittances several times, adding that though the corporation confirmed the figures, nothing had been done about it till date.

Besides the unremitted revenue, Adio informed the committee that Nigeria lost $15.9bn worth of crude oil to outright stealing and vandalism during the four years under review.

Giving the year-by-year breakdown, Adio said $4.3bn was lost in 2011; $2.72bn in 2012; $4.7bn in 2013; and $4.1bn in 2014.

He expressed concern that until Nigeria installed a technology-driven system with a command centre to monitor crude movement and exports, the country would continue to “record monumental losses.”

Adio added, “We cannot afford these losses as an economy, looking at the strategic importance of oil to us.

“NEITI has often made references to the type of command centre installed by the Kingdom of Saudi Arabia.

“There is a video clip on the Internet where the Saudis demonstrate how they monitor their crude oil movement to the very last drop.

“Why can’t we install such a technology here? How many personnel can we really be able to put on ground at all the terminals and points to monitor oil operations?”

He added that NEITI believed the $17bn crude and gas losses being investigated by the committee could have resulted from “under-declaration at the terminals or simply, stealing of the crude” through illegal routes.

“Nigeria till date can’t determine its crude oil production independently without relying on the operators.

“Without the ability to determine our production independently, we can’t expect to get accurate production reports all the time,” Adio said.

The committee also engaged the Nigerian Maritime Administration and Safety Agency on the crude theft but was surprised that the agency had never prosecuted any vessel operators for violations.

NIMASA’s Director,  Akani Pius, who spoke on behalf of the agency, said the much it could do was to impound and detain vessels over violations.

Pius claimed that detaining the vessels and engaging the owners in negotiations was more effective than prosecution.

According to him, vessel owners will quickly pay fines after being detained in a bid to avoid incurring demurrage.

“It will cost them between $15,000 and $25,000 demurrage per day; so, no vessel owner will allow their vessel to be detained,” he added.

But, lawmakers argued that by failing to prosecute offenders, NIMASA was merely encouraging more operators to ship out products in breach of extant laws.

Namdas stated, “NIMASA, you were the one that wrote to complain of these violations before Molecular Power System was contracted to carry out the investigation into our crude oil losses.

“Much as your intention was good, you have not done well.

“You know of violations, but you will not prosecute because you feel negotiations will serve your purpose better.”

The House had by its resolution in December 2016, ordered the probe after a motion by a member,  Johnson Agbonayinma, established evidence of “fraudulent transactions and irregularities” in crude oil and gas exports within the period under review.

Part of the information at the disposal of the committee, put the figure of undeclared crude shortfalls between 2011 and 2014 at 57,830,000 million barrels.

“This translates to well over $12bn worth of crude shipped to the United States.

“Also, over $3bn worth of crude oil was shipped to China and $839,522,600 worth of crude was taken to Norway.

“These figures were conclusively ascertained by buyers, bill of lading, arrival dates, destination ports, quantity of crude oil and other documented information,” the document stated.

The US was listed as the leading destination for the crude, out of the 51 countries that received crude exports from Nigeria within the period.

“The report was made available to the former President (Goodluck Jonathan); Office of the Attorney General of the Federation; Nigerian Maritime Administration and Safety Agency; and the Economic and Financial Crimes Commission, and that as of today (2016), the country has to its credit, over $17bn of recoverable shortfalls from undeclared crude oil exports to global destination,” it added.

In the case of liquefied natural gas shortfalls, the document noted a loss of “727,460 metric tonnes, estimated at about $461,044m, firmly established shortfall from shipment to seven countries.

“These have been established as undeclared cargoes.”